GM Fined $35 Million for Ignition Switch Response
General Motors Co has been hit with a fine of $35 million for the delayed response it a defect in an ignition switch in millions of its vehicles. Federal regulators accused a number of officials at the company of hiding the problem that has been tied to a minimum of 13 deaths.
Anthony Fox the Secretary of Transportation announced GM’s fine, which was the maximum that could be imposed. Other investigations are currently taking place over the handling by the automaker of its recall. Those other investigations are being conducted by the federal government and might include harsh punishments.
It was not clear how or if the additional probes might become influenced through the announcement on Friday by the Transportation Department.
The defect in the ignition switch was noticed originally by the U.S. automaker over a decade ago. However, there were no recalls for that until February of 2014 despite years of complaints by consumers.
In addition, the National Highway Traffic and Safety Administration’s acting chief, David Friedman said that employees at GM from engineers to the top executives had been aware of information for years prior to the company recalling millions of vehicles.
Friedman did not name any executives and said no information indicating that Mary Barra the CEO had known earlier about the ignition switch problem. Barra took the reins of GM last January, becoming just the first woman to lead a major automaker.
The NHTSA chief also slammed the corporate philosophy of GM and pointed toward internal training papers that discouraged GM engineers from using certain words such as defect or safety when identifying risks with products.
In addition to announcing the fine of $35 million, officials announced that GM would now fall under more scrutiny by the federal regulators.
GM must hold regular meetings together with the NHTSA to show its efforts to find safety problems and it must also give the regulatory agency reports monthly on any emerging issues regarding defects.
A senator in Washington criticized the NHTSA for not spotting the problem earlier, Senator Richard Blumenthal a Democrat from Connecticut said the NHTSA should bear some of the blame.